Stem talks $175 million seven-year green convertibles to yield 3.75%-4.25%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., March 29 – Stem Inc. plans to price $175 million of seven-year green convertible notes after the market close on Wednesday with price talk for a coupon of 3.75% to 4.25% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Morgan Stanley & Co. LLC is lead left bookrunner for the Rule 144A offering, which carries a greenshoe of $35 million.

The notes are non-callable until April 5, 2027 and then subject to a 130% hurdle.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to repurchase a portion of the company’s 0.5% green convertible notes due 2028 in privately negotiated transactions and for general corporate purposes.

Stem is a San Francisco-based smart energy storage solutions company.

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